QBE cops a ‘please explain’ over downgrade

explain” by the Australian Securities Exchange, asking when it first became aware of the higher claims and whether it had met its continuous disclosure obligations.

The insurer a week ago revealed it had suffered a blowout in small claims in Latin America and Asia, within its small claims division, during the first five months this year. That revelation sparked a rout in its share price – which fell more than 10 per cent in a day – wiping $2 billion from its market value.

In its response to the ASX query, QBE said it held a board meeting on June 21.

Directors “clarified and confirmed” the financial conditions of each global division, including the emerging markets arm, where a claims blowout was discovered, it said.

This prompted the warning – released to the market later that morning – that the company would not reach its stated profit forecast, QBE said.

“In the days before the announcement was made, key information was still being gathered and assessed ... and QBE’s global divisions were reevaluating and finalising individual forecasts,” QBE general counsel Carolyn Scobie said.

The announcement was made immediately after the information was vetted, signed off at a senior level and approved by the board, she said.